Internet Convergence Dominates MobileMonday Global Summit

By Allison Dollar

Lending it a resemblance to a United Nations conclave, flags flew high at the MobileMonday Global Summit, held September 10 in Helsinki. The image befits a thoroughly international event. Corporate executives, MobileMonday chapter heads, developers, early stage companies, financiers and vendors from around the globe gathered to assess the mobile industry, generate new business, and network. With dozens of countries represented, interconnectedness remained the watchword—panel discussions, presentations and pitches reflecting the community’s scope. But the event was dominated by variations on a theme: mobile's inevitable convergence with the Internet.

Convergence Confusion

In his opening presentation, “Future of the Mobile Industry,” Lars Persson, managing partner at Gartner in Sweden, stated that operators “lack clear strategic vision” regarding convergence, calling the climate a “web of wireless confusion.” Later, speakers disagreed on the timeline but agreed about the shift in focus toward consumer behavior, including social networks and user-generated content. MobileMonday Tokyo co-founder Daniel Scuka emphasized that convergence is happening at the software level, not by merging devices into “some sort of Frankenstein, hyper do-all device,” but rather as “Web 2.0 extended to the pocket.” Others support his contention that this direction, coupled with the move to 3G and 3.5G, indicate that while carriers' power wanes, content owners are better positioned. “A carrier without content is just an empty bit pipe.”

Social Media panel moderator Christopher Billich concurred. “The walled-garden models many operators still run on today are in the process of crumbling big time,” said Billich, VP, Overseas Development for Infinita. “Operators will transform into either content/service aggregators—a strategy Japanese operators have been highly successful with for almost a decade—or relatively dumb bit pipes.”

But as Nokia’s Mark Ollila, a director in the company’s games group, maintained, “If content is king, distribution is King Kong.” Participants acknowledged that market innovation has been accelerated by equally important trends toward mobile computing, more sophisticated devices, and added-value services — plus the need for faster, cheaper bandwidth.

Nowhere has that innovation been pushed faster than in Asia — Japan in particular. China, too, is on the rise, with IM as the entry point for many activities, according to Bruno Bensaid, a partner at China Expansion Fund and founder of MobileMonday Shanghai. Eastern Europe, Russia, the Ukraine and surrounding regions also boast thriving development, witnessed by home-grown Finnish and Swedish presenters at the Summit as well as those in a Summit excursion to St. Petersburg.

The U.S., meanwhile, has some catching up to do. “Being at this summit just reinforced for me how far behind we are with regard to carrier adoption of new technology,” said Los Angeles MobileMonday leader Sarah Miller, president of Axis Marketing & PR. “U.S. players need to find better ways to work with carriers, and to get past barriers to entry when it comes to delivering mobile content and entertainment.” Still, most countries struggle with standardization issues, licensing complications and of course privacy, piracy and digital-rights-management hurdles.

The wild card remains the youth market, which builds whole new usage patterns and repurposes applications in unforeseen ways. What happens to the business, Justin Oberman of Mopocket.com asked the Social Media panel, when you “take the talk out of mobile” and address a new customer base that thrives on “continuous partial attention”?

B2B Rules

Preoccupation with the youth segment distracts from B2B applications, which Gartner’s Persson outlined as a growth opportunity. He said while demand is either weak or unclear for extra media services, mobile knowledge workers are seeking value. Gartner expects enterprise mobile devices to be a realistic way to replace the PC with one integrated device. The Summit included case studies in enterprise integration for manufacturing (Avecon), supply chain RFID (Ponsec), and other fields coming out of research, such as eLearning, remote medicine and even a seeing-eye phone.

Like the more glamorous entertainment and social applications, these are all heavily data-dependent. Several speakers argued that, in order to gain greater long-term revenue, operators should change their approach and offer flat rates on data, mobile email and other business-friendly services — even though they’ll sacrifice short-term gains from access and SMS revenues. Furthermore, presentations on developing nations emphasized that vast numbers of people want nothing more than simple text-based services.

Paying for It

Emerging services require micro-payments or commercial transactions. While some panelists alluded to mobile retail via RFID embedded chips, outside of Asia most are waiting for commerce deployments. For the most part, the use of transactions was discussed as part of content-marketing programs, entertainment-event ticketing, and product promotions rather than for shopping or direct-response advertising. In Japan, reported Madanmohan Rao during his Asia markets discussion, the phone already serves not only as a wallet, but a digital shopping device through picture functions. In Bollywood, ringtone music sales top those of CDs. (Christopher Billich notes that in Japan the market volume of mobile commerce generated by shopping and auction sites is about 1.5 times the annual total revenues from mobile content.)

Nokia’s Ollila had previously outlined content models tthat will take advantage of the backchannel, such as try-and-buy and renting. Along those lines, COO Leif Fagelstedt introduced the groundbreaking Blyk. The free pan-European operator derives revenue from targeted advertising, amplified through what Fagelstedt calls a “secret sauce” — apparently, sophisticated affinity programs coupled with user transactions. Bruno Bensaid later speculated that, if successful, Blyk’s model could spawn a whole new generation of MVNOs.

Self-Generating Societies

Blyk’s integration of brands into a shared experience points the way for next-generation mobile programs. The integration of advertising and programming seen on broadcast television and the Web makes sense to mobile content aggregators. However, while the aggregation and projected growth of video on mobile devices preoccupies content holders, regulations, standards and piracy concerns have kept U.S. rollouts slow. Elsewhere, entertainment continues to be an uneven revenue driver. Consequently, throughout the Summit, social networking, with video components and user-generated content, took center stage.

Emerging companies such as Floobs, SoonR, QIRO, mCasting and Fromdistance, offered their video solutions, and Fring’s intriguing free-VoIP model could be a Trojan horse for a host of other services. With the increased variety and complexity of the mobile Web come predictable hazards, such as the apparent black market for expensive ringtones encountered by Nidal Barake of Caracas. The Japanese contingent contends black markets are unheard of there because operators offer a more favorable revenue share with content providers.

The logical step in integrating multiple media will be the increasing blurring of real and virtual worlds, according to Atakan Cetinsoy, VP of MyStrands. Centinsoy sees the social aspect of social networking supplanting the tech-efficiency quotient. “The connection will be person-to-person,” he said in his “Future of Mobile Communities” presentation. “We won’t be linking documents. That’s why it’s important to respect micro-niches and embrace taste-based marketing based on the shared wisdom of the crowd, using social recommendation and collaborative filtering.”

How Fast, How Far

How fast and how far this next generation of social interactivity will be infused with video remains to be seen, but most experts predicted it will take a while for ubiquity. “The infrastructure is insufficient for mobile TV to be a real business in the near future,” commented Sarah Lipman of Israel-based Power2B. “Hardware is still an issue, and keys are suboptimal for creating immersive experiences.”

But no one denied that the race is on. Lawrence Cosh-Ishii predicted “increased awareness, greater adoption, faster speeds, lower data costs. If Japan is any indication …. then mobile commerce with imbedded RFID payment solutions and mobile TV that is not IP streaming but terrestrial-broadcast digital quality and freely available, combined with text-and-graphic interactive menus, would be the two most likely service evolutions.” Along those lines, researcher Dr. Hitomi Murakami of KDDI reminded the audience about ignored opportunities, such as the global trend toward aging populations, along with the tech march from our current peer-to-peer interchange morphing toward peer-to-machine and eventually machine-to-machine.

Whatever the future holds, it lies in the East. “The ’70s belonged to TV, the ’80s belonged to cable and satellite, and the ’90s belonged to Internet 1.0,” commented Daniel Scuka. “But the 2000s and beyond belong to mobile, [with] much of the real innovation in content, business models and delivery happening in China, Japan, Korea and India. Sure, Apple’s iPhone is cool—but so what? The Japanese and Koreans have already had terrific mobile music for half a decade.”

Source: www.mobi-lize.com